“Google is a monopolist.” This is a statement from a ruling issued on Monday by U.S. federal judge Amit Mehta. The judge concluded that the company violated the Sherman Act with its practices in the search and advertising markets. This is a case of significant magnitude, comparable to the U.S. lawsuit against Microsoft more than two decades ago.
The ruling is a historic defeat that has shaken the power of the search giant and could potentially lead to significant changes in the company’s operating structure, depending on the outcome of the case. The Department of Justice sued Google in October 2020, alleging, among other things, that Google paid companies such as Apple or Samsung to be the default search engine on their devices.
The Consolidation of Google’s “Monopoly Power”
Mehta believes that Google has maintained its position in the search market by creating significant barriers to competition. One strategy it has used to do this is by becoming the default search engine on a wide range of devices. According to the lawsuit, the majority of users stick with the default search settings.
The exact amount of money that Google paid out for its default search engine agreements last year hasn’t been publicly announced. However, the lawsuit revealed that the company led by Sundar Pichai paid $26.30 million in 2021. The judge described this as a serious issue, stating that it “foreclose[s] a substantial portion of the general search services market and impair[s] rivals’ opportunities to compete.”
In his ruling, Mehta disputed some of the Justice Department’s allegations against Google. He pointed out that the company doesn’t hold a monopoly over the general search advertising market, given that other major players like Amazon and Walmart also display ads on their own websites. However, Mehta did acknowledge that Google does have a monopoly on text ads that appear alongside search results.
Although this ruling is significant, its impact on Google remains uncertain. According to Bloomberg, the Department of Justice hasn’t indicated yet what changes it’ll pursue, but the news agency suggests that it may seek to separate certain relevant business units. For instance, there could be a push to separate the search business from Android or Chrome.
Google is still dealing with a separate case with the Department of Justice regarding its advertising business. The Department of Justice has also initiated legal action for monopoly practices against Amazon, Apple, and Meta. It seems that we’re in for some interesting years of regulating big U.S. tech companies and the potential consequences that might entail.
This article was written by Javier Marquez and originally published in Spanish on Xataka.
Image | Greg Bulla | Firmbee.com
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